His son is to appear before the ED on Wednesday in a case of violation of Foreign Exchange Management Act by the family-owned company Rana Sugars Limited.

At the centre of controversy after tendering his resignation from the cabinet that remains to be accepted, power minister Rana Gurjit Singh’s problems seem to be far from over. His son is to appear before the Enforcement Directorate (ED) on Wednesday in a case of violation of Foreign Exchange Management Act, 1999, (FEMA) by the family-owned company Rana Sugars Limited.

The ED had on January 2 issued summons to Inder Partap, who is managing director of Rana Sugars, a firm which is in collaboration with the state-run Punjab Agro Corporation, and raised doubts over $18 million (Rs 100 crore) raised abroad a decade ago by floating foreign shares, or GDRs (global depository receipts), allegedly without mandatory permission of the Reserve Bank of India (RBI).

When contacted, Inder Partap said, “I am going to appear before the ED office in Jalandhar with all documents that the agency has sought. All our funding is crystal clear, and we have not violated any RBI guideline.”

Circle of money, via Portugal

Officials in the ED — unnamed here since not authorised to speak with the media — said it is suspected that the Rana group company put in its own guarantees for loans taken by the investors abroad for subscribing to its shares. “Indian firms issuing GDRs have to comply with certain conditions under the FEMA, and filing of information with the RBI is mandatory. But the RBI has told ED that it has not been intimated if Rana Sugars issued any GDRs,” said an official.

The company is also accused of not filing any information regarding the use of the money in India. ED officials further said that as per information provided by the RBI, the money thus raised was kept in a bank in

Portugal’s Madeira Island for some days before being transferred to India.

The Securities and Exchange Board of India (SEBI) also flagged the issue with the ED with recommendations of carrying out a probe, it is learnt.

Before issuing the summons, the ED wrote to Rana Sugars asking for copies of balance sheets from 2005-06 to 2007-08, along with details of GDRs issued by the company. Inder Partap said, “Our company has provided all details available with us. These documents were submitted to the RBI as well. We will fully cooperate with the ED, and that’s why I am providing all documents to the it on Wednesday.”

He added that the issue was raised in 2008 as well and “at that time, too, the management of Rana Sugars submitted documents to the RBI”.